The opportunity cost of increased production of some good can be measured with
A)the slope of a ray to the production possibilities curve.
B)the area under the curve of a production possibilities curve.
C)the area of the rectangle bounded by the axes and the point on the production possibilities curve.
D)the slope of the production possibilities curve.
E)All of the responses are correct.

Question

Quizplus · Accepted Answer

The opportunity cost of increased production of some good is measured by the slope of the production possibilities curve, as it represents the rate at which one good must be given up in order to produce more of the other good. Choices A, B, and C may be used to analyze production possibilities and trade-offs, but they do not specifically measure opportunity cost. Choice E is incorrect because not all of the responses are correct.

The Opportunity Cost of Increased Production of Some Good Can